The Compass Bancshares acquisition provides Banco Bilbao with enough capital to tap into the growing Southern US Hispanic population and their economic pull. Nearly half of all Compass Bank branches are located in Texas, one of the more attractive markets for Hispanic/Latino consumers. Compass holds $34 billion in assets, and earned record profits of $460.4 million in FY 2006. A strong banking position in Texas provides substantial growth potential for Banco Bilbao’s North American banking operations. As the US Hispanic population continues to grow, competition for Hispanic customers will intensify. Since 2000, 50% of all births in the US are of Hispanic decent. In fact, Bank of America (NYSE:BAC) has already begun to market their credit card services to this growing Hispanic contingent; targeting illegal and legal Hispanic immigrants has become a popular marketing tactic in the United States. If Banco Bilbao plans to compete with domestic and international banking firms for Hispanic/Latino customers, acquiring one of America’s 30 largest banks is a step in the right direction.

Asia-Pacific Plan: Partnership with CITIC

Banco Bilbao also has eyes for the Asian banking market as well, particularly in China and Hong Kong. Even a small market share in the massive Asian market could mean big profits in the future. New Asian-Pacific branches additions, along with the assistance of CITIC, will expedite the global “branding” process that would delay most growth initiatives. BBVA Group could also pursue partial equity stakes in well established Chinese banks.

First, nice play here- Barlcay’s has been on a great tear. I do think, however, that there are some ’sexier’ bank plays abroad that will outperform BCS (unless perhaps we see a merger)… e.g. I think you’ll continue to see Banco Bilbao (BBV) outperform it in 07- jmo

Zero Long-term Debt - Banco Bilbao is long-term debt free. When analyzing companies, I favor firms that incur little or no debt. Companies with little debt usually have wonderful management, driven by a painstaking CFO, and understand how to keep profits in the black.

1. How much does the Compass Bancshares acquisition impact Banco Bilbao’s international growth plans? 2. Is Banco Bilbao the best Spanish banking stock for international investors? 3. Will Banco Bilbao offer similar loan incentives to illegal immigrants as Bank of America did? 4. Is BVV stock a buy, sell, or hold?